By ARC
India’s Adani Group is set to hire one of the “big six” accounting firms to conduct a comprehensive audit of its corporate governance and audit practices. The move comes following allegations of fraud by short-seller Hindenburg, which raised concerns about the conglomerate’s use of offshore tax havens and high debt levels. The allegations led to a drop in Adani’s market value by $65 billion.
The audit will cover eight of the group’s listed firms and will evaluate related party transactions, accounting practices, and compliance with corporate governance standards. The findings will be presented to the board of Adani Enterprises and, if deemed necessary, legal action may be taken based on the results. The audit will take place after the completion of Adani Enterprises’ follow-on public offering.
Adani has issued a 413-page response to Hindenburg’s allegations, asserting full compliance with local laws and proper regulatory disclosures. Despite this, the National Stock Exchange of India has reduced the circuit limits on three of Adani’s companies, including Adani Transmission Ltd, Adani Total Gas Ltd, and Adani Green Energy Ltd, to 10% from 20%.
Adani’s recent $2.5 billion secondary share sale faced weak investor sentiment, closing 7% below the lower end of the offer price band. The results of the independent audit are expected to provide clarity and restore investor confidence in the company. The audit will also aim to determine the accuracy of Hindenburg’s claims, which have caused significant damage to Adani’s reputation.
The Adani Group is a conglomerate of several companies with interests in ports, agribusiness, energy, real estate, financial services, and defense. The group is one of India’s largest companies and has faced criticism in the past for its environmental practices and business dealings. An independent audit of its corporate governance and audit practices will help to restore the company’s image and promote transparency.
Adani has been expanding rapidly in recent years and has invested heavily in renewable energy. The company’s goal is to become a major player in the global energy market and to contribute to India’s ambitious target of becoming a carbon-neutral country by 2050. The results of the independent audit will provide important insights into the company’s operations and help to ensure that its growth is sustainable and in line with good corporate governance practices.
In conclusion, the decision by the Adani Group to undergo a corporate governance audit by a top accounting firm is a positive step towards restoring investor confidence and promoting transparency. The results of the audit will provide important information about the company’s operations and will help to ensure that it continues to grow in a sustainable and responsible manner.
